NRA in Crisis: 2020
Allegations of extortion, corruption, and a failed coup attempt: This is the National Rifle Association of 2020. The NRA finds itself in the midst of an all-out “civil war,” which has alienated many of its members and donors, threatened its financial viability, and potentially jeopardized its tax-exempt status. As one major donor put it, the NRA’s infighting “has become a daily soap opera, and it’s decaying and destroying the NRA from within.”
The NRA is weaker than it has ever been. It faces investigations by attorneys general in New York and Washington, D.C., an exodus of board members, and the “abject failure” of its ambitious propaganda arm NRATV. The organization ended 2018 with a $10.8 million deficit – the third year in a row it found itself in the red financially. Even President Trump has commented on its decline, tweeting that the NRA “must get its act together quickly, stop the internal fighting, & get back to GREATNESS – FAST!”
According to a “secret recording” obtained by NPR, NRA CEO Wayne LaPierre said in a speech to NRA board members and staff that the NRA took “about a $100 million hit” in lost revenue and “real cost to this association” in 2018 and 2019 due to the various legal issues facing the organization. He also said that for the NRA “to survive,” he took “about $80 million” out of the budget and “took it down to the studs.” He added that, “We’re not out of the woods yet. We still gotta wrestle with this financial situation.”
How did the NRA go from a supposed political power broker to simply broken?
Financial and political crises have ripped the organization apart in recent years and exposed alleged wrongdoing at the highest levels. Internal NRA documents show that the organization has spent tens of millions of dollars on executive salaries, legal bills, administrative costs, and extravagant travel, while less than 10 percent of NRA funds have been spent on its stated core mission of gun safety, education, and training.
The NRA’s own board members and accountants have called into question lavish, legally suspect personal spending by its leadership, including millions of dollars’ worth of Italian suits, private jet trips, and personal vacations for its CEO, Wayne LaPierre; and $450,000 in luxury hotels, restaurants, and cigar bars for its top fundraiser, Tyler Schropp.
But board members’ calls for an audit have gone unheeded. In fact, one board member who questioned LaPierre’s spending said leadership had told “outright lies” and removed him from key committees for daring to challenge the “cabal of cronyism.” Another board member labeled the NRA’s current leadership as “loathsome toads” for their handling of questions about spending. More than 10 percent of the organization’s 76-member board has resigned in the past year alone.
Multiple investigative reports have alleged that many in the NRA’s leadership have used the organization as their personal cash cow, resulting in a culture of self-dealing, insider payments, and conflicts of interest. Nearly one-quarter of the NRA’s board members received money from the organization over a three year period. NRA leaders have been accused of using their own companies, LLCs, and side arrangements with business partners to allegedly funnel money from the organization to themselves. That reality has led one tax-exempt-status expert to conclude that “the volume of transactions with insiders and affiliates of insiders is really astonishing.”
Questionable payments to the NRA’s biggest vendors “pose an existential threat to the financial stability of the NRA,” according to former NRA President Lt. Col. Oliver North, and tens of millions in legal fees to its major law firm have been “draining NRA cash at mindboggling speed.” In addition to bringing financial woes, several lawsuits have also aired the NRA’s dirty laundry in civil courts. An ugly, ongoing dispute with the group’s longtime public relations firm, Ackerman McQueen, includes allegations of breach of contract, breach of fiduciary duty, extortion, abuse of process, and fraud.
In 2019, the media platform NRATV closed its doors. According to the NRA itself, it was a $20-million-per-year “abject failure” that aired content “which some NRA leaders found distasteful and racist” and was viewed by some within the NRA as little more than a “dystopian cultural rant that deterred membership growth.” For all the money the NRA shelled out to run it, NRATV drew “minuscule” web traffic and “was a failed endeavor under any appropriate performance metric.”
Bitter power battles between board members and senior leadership resulted in a lawsuit in New York State in which the NRA accused its former president, North, of orchestrating a “failed coup attempt” and a “conspiracy… to extort the NRA.” North fired back, claiming that LaPierre had “total dictatorial control over the NRA” and had waged “a retaliatory campaign” against North for shedding light on how the organization has really been spending its members’ dues. But despite the fact that LaPierre has presided over the NRA’s spectacular meltdown, he received a 57 percent increase in compensation in 2018 and is even set to receive a cushy salary for years after he leaves the NRA.
The NRA heads into 2020 without its top political strategist and biggest and best-known lobbyist, Chris Cox, who was another casualty of the organization’s 2019 loyalty purge. Cox was accused of being part of efforts to oust LaPierre, and his resignation in June 2019 preceded the NRA’s stunning defeat in the November Virginia legislative elections.
Can the NRA survive its own political and financial crises?
How much has the organization strayed from its original mission of ensuring safe and accurate firearm usage?
The following report details the far-ranging allegations of self-enrichment, fraud, and illegal conduct that have emerged with respect to the NRA and demonstrates the unprecedented vulnerability the organization faces in 2020.
- NRA Annual Meeting 2019: Chaos, Drama, and Infighting
- Alleged Self-Dealing, Insider Payments, and Conflicts of Interest at the NRA
- NRATV Shuts Its Doors
- NRA Board and C-Suite in Turmoil
- Declining Finances Lead NRA to Largely Abandon Core Member Programs
- Dwindling Power: Virginia Rejects The NRA’s Agenda in 2019
I. NRA Annual Meeting 2019: Chaos, Drama, and Infighting
Instead of a showcase of strength, the NRA’s 2019 Annual Meeting highlighted internal strife and financial mismanagement that boiled over into a public organizational meltdown in front of thousands of NRA members. The rift was on full display when then-NRA President Oliver North unexpectedly departed the Annual Meeting and had his resignation letter read from the stage. As the Washington Post reported, in the year since, the NRA has been embroiled “in a civil war… that is ripping apart the powerful gun lobby.”1 While subsequent court filings and investigative reporting have laid bare the conflict and division within NRA leadership, the 2019 Annual Meeting was a critical inflection point in the NRA’s deepening crisis.
In the lead-up to its 2019 Annual Meeting, the NRA was locked in a dispute with its largest and longest-serving partner, Ackerman McQueen.
Starting in 1981, the NRA worked closely with public relations firm Ackerman McQueen to shape its public image, paying the company at least $127 million since 2012.2 However, a series of news articles and other revelations emerged in early 2019 that indicated that the Ackerman McQueen–NRA relationship was under strain. Weeks before the 2019 Annual Meeting, the NRA sued Ackerman McQueen to provide records that justified its billings to the NRA.3 The lawsuit has since spiraled and expanded to include claims and counterclaims of breach of contract, breach of fiduciary duty, abuse of process, fraud, and other legal causes of action.
In early 2019, then-NRA president Oliver North began to raise questions about the NRA’s ballooning legal bills.
Ahead of the 2019 Annual Meeting, North began raising alarms internally about the large legal fees being charged by the law firm of William Brewer,4 including saying the invoices were “draining NRA cash at mindboggling speed” and “pose[d] an existential threat to the financial stability of the NRA.”5 According to North, NRA CEO Wayne LaPierre refused repeated requests for an audit of the legal fees.6
The 2019 NRA Annual Meeting was an absolute debacle.
While much of the discussion about financial mismanagement, alleged self-dealing, and legal fees was taking place behind the scenes, over the course of three days, the 2019 NRA Annual Meeting unearthed some of the NRA’s deepest secrets and rivalries.
- LaPierre accused North of extortion, and North attempted to form a “crisis management committee”. On the first day of the 2019 NRA Annual Meeting, Wayne LaPierre wrote a letter to the NRA board claiming that Oliver North had attempted to extort him.7 In LaPierre’s telling, North had called a LaPierre staffer, asking her to pass along a message: if LaPierre did not resign, North and Ackerman McQueen would release a “devastating account” of the NRA’s financial status along with other lurid accusations.8 According to North, however, he had written to the NRA’s executive committee hours earlier to form a “crisis management committee” to deal with the myriad of financial and management issues facing the organization, but the committee was shut down.9
- Hours after North and LaPierre appeared on the same stage, news of the alleged extortion attempt broke wide open. On Friday, the second day of the Annual Meeting, LaPierre and North––along with President Trump and other NRA allies––appeared onstage at the NRA Institute for Legislative Action (NRA-ILA) Leadership Forum.10 By that night, however, details of LaPierre’s allegation that North had tried to extort him were in the news.11
- North was ousted as president, and NRA members unsuccessfully tried to oust LaPierre. On the third day of the Annual Meeting, at the general meeting of NRA members, North issued a statement that he would not be running for another term as NRA president, explaining that he had hoped to be “endorsed for reelection” by leadership but had been “informed that that will not happen.”12 This resulted in an awkward situation on stage, with LaPierre sitting next to an empty chair previously designated for North, listening to North’s resignation speech being read by another board member. LaPierre then presided over the members’ meeting and delivered a business-as-usual speech, never mentioning the swirling crisis. Ahead of the meeting, “LaPierre urged nominating committee members not to support North for another term, board members told their colleagues.”13 Several NRA members in attendance spoke out against NRA leadership and demanded answers. After the speeches, there were some member-initiated motions to have a vote of no-confidence in LaPierre, but the effort was defeated.14
In the weeks following the Annual Meeting, the NRA and Oliver North would level dueling allegations in a lawsuit in New York State.
The NRA accused North of orchestrating a “failed coup attempt”15 and a “conspiracy… to extort the NRA.”16 North accused LaPierre of using his “total dictatorial control over the NRA” to wage “a retaliatory campaign” against him.17
And most significantly, with news of financial mismanagement, extortion, and other allegations breaking with regularity throughout the Annual Meeting, the New York Attorney General’s office announced it was investigating the NRA’s tax-exempt status.18 The NRA is chartered and incorporated in New York State, and the investigation reportedly involves the NRA, NRA Foundation, and other NRA-related entities.
While the result of this and several other investigations into the NRA’s business practices remains to be determined, the NRA itself acknowledges the scrutiny is having a financial impact. According to a “secret recording” obtained by NPR, NRA CEO Wayne LaPierre said in a speech to NRA board members and staff that the NRA took “about a $100 million hit” in lost revenue and real cost to the organization in 2018 and 2019 due to the myriad of legal issues facing the NRA.
II. Alleged Self-Dealing, Insider Payments, and Conflicts of Interest at the NRA
Since the close of the 2019 NRA Annual Meeting, the allegations of wrongdoing and scandal have consumed the NRA, with even more information coming to light amid lawsuits and widening regulatory scrutiny. Over the last year, dozens of media reports and NRA documents have revealed that the NRA has spent millions on questionable personal expenses for insiders and engaged in potentially illegal conduct, all of which is fundamentally at odds with the NRA’s nonprofit incorporation and mission. As reported by the New York Times, at the same time that “[s]enior staff cashed in,” the necessary oversight “has been complicated by paydays” to many of the 76-member board of directors.19
NRA CEO Wayne LaPierre has received lavish personal and financial benefits from the organization.
Court filings and supporting documents indicate that Wayne LaPierre used NRA funds to pay for nearly half a million dollars in high-end Italian suits and extravagant international travel.20 The travel expenses included thousands of dollars spent at a luxury resort on Lake Como, in Italy, and more than $70,000 for a trip to the Bahamas for LaPierre and his wife just three days after the 2012 mass shooting at Sandy Hook Elementary School in Newtown, Connecticut.21 Moreover, LaPierre spent over $274,000 at the elite clothing boutique Zegna during his time at the NRA, including at the Beverly Hills Zegna location. According to supporting documents, on two dates, LaPierre’s purchases at that store exceeded $38,000.
Further, court filings indicate that shortly after the mass shooting in Parkland, Florida, the NRA contemplated spending $6.5 million to buy LaPierre and his wife a mansion in Dallas through Ackerman McQueen.22 The NRA even issued a $70,000 check to a newly formed LLC to facilitate this purchase.23 Ackerman’s CFO has stated in a court declaration that he refused to go forward with the acquisition when “it became apparent… that Mr. LaPierre was more interested in purchasing a lavish home for himself”, than addressing purported security concerns.24 In a separate questionable real estate transaction, which the NRA’s own accountants reportedly called “vague and deceptive,” the NRA reportedly paid $1.8 million for the rental of a house in Southern California from a TV production company that produced a show featuring LaPierre.25
Facts surrounding the NRA’s use of charter planes have also come to light, including that the NRA “used unorthodox means to arrange [LaPierre’s] travel, including his use of private jets for almost every trip.”26 The same reporting indicates that NRA accountants were “instructed to pay” for certain travel “without the usual detailed supporting documentation, which was held in a private file in the NRA treasurer’s office,” including private flights that “totaled about $2 million in one recent year….”27 Other investigative reporting uncovered that the NRA “paid for private jets to fly to and from central Nebraska to ferry relatives of… Wayne LaPierre, according to travel itineraries, emails and aviation records.”28
Even amid turmoil and financial problems at the NRA, LaPierre received a 57 percent increase in compensation in 2018, bringing his annual overall compensation to $2.15 million.29 State regulatory filings indicate that the NRA has also arranged a golden parachute for LaPierre, which would pay him his current base salary even after he leaves the organization.30
NRA Spending on Wayne LaPierre
in compensation in 2018
Early retirement payout
High end suits
in chartered flights
Contemplated purchase of Dallas mansion
Concerns have also been raised about questionable benefits to the NRA’s lead fundraiser, Tyler Schropp.
Court filings show that Schropp ran up more than $450,000 on an American Express card that was allegedly billed to and reimbursed by the NRA.31 The expenses include $231,000 on hotels like the Ritz-Carlton, Four Seasons, and Waldorf Astoria, and $51,000 at hotels, casinos, restaurants, and cigar bars in Las Vegas.32 Schropp also was the treasurer for, and held an ownership stake in, a television company, Under Wild Skies, that received approximately $18 million in business from the NRA.33
Additionally, a number of revelations have come to light about the NRA’s former chief financial officer, Wilson “Woody” Phillips.
While serving as the NRA’s chief financial officer, Phillips simultaneously held the same position at Memberdrive, “a short-lived marketing startup that brokered deals between membership organizations and businesses willing to pay royalties for their endorsements.”34 One of Memberdrive’s top clients was the NRA; at the same time, the company employed Susan LaPierre, the wife of Wayne LaPierre,35 raising questions as to whether the arrangement was disclosed and/or approved by the NRA board and how much money Susan LaPierre received due to the arrangement, among other questions.
In a separate questionable transaction, according to a leaked internal memo written by NRA accountants and presented to the organization’s audit committee, the NRA paid $1.4 million to a company run by a woman with “a long-standing personal relationship” with Phillips.36 Phillips also reportedly paid a below-market rate, $25,000, in the form of a charitable donation, for a 2018 cruise on a 104-foot yacht owned by an executive of a company that did business with the NRA.37 Prior to working for the NRA, Phillips was reportedly fired from his previous job for allegedly embezzling “at least a million dollars.”38
NY AND DC ATTORNEYS GENERAL INVESTIGATIONS
As a result of the sprawling evidence of financial mismanagement, self-dealing, and questionable business practices, New York Attorney General Letitia James is conducting an investigation into whether the NRA violated New York’s charities law, which some experts have even opined could lead to a criminal investigation of Wayne LaPierre.39 Indeed, a court filing from Ackerman McQueen indicates that “LaPierre became preoccupied with going to jail.”40 District of Columbia Attorney General Karl Racine is also investigating the NRA and NRA Foundation for suspected violations of nonprofit law.41 These regulators have a particular interest in the organization, since the NRA is chartered in New York and the NRA Foundation is chartered in Washington, DC.
As the New York Times reported, “while both the N.R.A. and its foundation are tax-exempt, only donations to the foundation are tax-deductible. Tax experts say the foundation has become a back door for tax-deductible donations to the N.R.A. itself.”42 The New York Attorney General has also reportedly issued an additional subpoena to the NRA that calls for the production of “records related to transfers among N.R.A.-controlled entities, including the N.R.A. Foundation, an affiliated charity.” The inquiry also reportedly seeks information about regulatory filings, potential improper campaign coordination, and financial compensation for directors, among other topics.43
In October 2019, the New York Attorney General sued the NRA after alleging “a pattern of obstruction and interference” in the investigation, including efforts to prevent its former vendor, Ackerman McQueen, from promptly complying with a subpoena from the Attorney General.44 The court ultimately ruled against the NRA and the investigation is continuing.45
The questions about financial entanglements extend to the NRA board of directors, where 18 of the 76 board members received money from the NRA over the past three years.46
This shocking revelation led one Washington attorney who specializes in tax-exempt organizations to say that, “[i]n 25 years of working in this field, I have never seen a pattern like this… The volume of transactions with insiders and affiliates of insiders is really astonishing.”47 These financial relationships between purportedly independent board members and the NRA underscore the serious and widespread nature of self-dealing transactions at the NRA.
Some examples of those involved include:
- Former NRA board president Oliver North: According to leaked documents and North himself, North received a lucrative contract through the NRA at the same time he became board president in 2018. The contract, which was structured to be paid through Ackerman McQueen, reportedly compensated North “millions of dollars annually.”48 According to North and court filings by Ackerman McQueen, Wayne LaPierre helped negotiate a “term sheet” directly with North.49 In 2018 alone, North received more than $1.3 million from the firm, which the NRA reimbursed.50 The pass-through nature of the contract raises serious questions about whether the NRA was attempting to conceal its payments to its board president, especially since the NRA’s organizational bylaws do not provide for compensation of the board president.51 One concerned NRA employee wrote a memo shortly afterward, warning that “using a vendor to provide compensation to” North “does not work to hide disclosure of the compensation.”52 Months later, the NRA audit committee retroactively approved North’s contract.53
- Former NRA board president Pete Brownell: Crow Shooting Supply, a company controlled by Brownell, who resigned from the NRA board in 2019, received millions in payments for shooting supplies from the NRA over the course of several years.54 Moreover, the Senate Finance Committee Minority Staff Report titled “The NRA and Russia” indicated that Brownell attended the now-infamous 2015 NRA-organized trip to Russia to explore business opportunities with Russian arms manufacturers.55 In fact, in a contemporaneous email, Brownell described his NRA trip to Russia as “an opportunity to be hosted in Russia to broaden our business opportunities” and “to introduce our company to the governing individuals throughout Russia.”56
- NRA board member and former board president Marion Hammer: A prominent Florida lobbyist and NRA board member, Marion Hammer, came under scrutiny when it was revealed that she had taken out loans totaling over $250,000 from a Florida nonprofit organization that she leads and that is largely funded by the NRA.57 Regulatory filings indicate the loans were for property purchases. Separately, Hammer faced a Florida investigation into her lobbying disclosures to the state, which centered around her failure to disclose how much she was compensated by the NRA to lobby on gun issues.58 Hammer was ordered to amend past filings to include such information.
Questionable NRA relationships with vendors continued to raise questions of self-dealing and financial waste.
In July 2018, the NRA Board of Directors Audit Committee held an emergency meeting to discuss whistleblowing reports relating to vendor arrangements. Documentation was reportedly provided ahead of that meeting that listed concerns from NRA accountants such as “NRA pays overbilled, deceptive, vague invoices to ‘preferred’ vendors and contractors” and “decisions are made in the best interests of vendors,” not the organization. NRA accountants also reportedly complained of being pressured to issue payments for dubious expenditures.59 Some of the vendors involved in questionable dealing with the NRA include:
- Ackerman McQueen: The NRA has spent the past year embroiled in litigation against its longtime public relations vendor, Ackerman McQueen. Public reports estimate that Ackerman’s relationship with the NRA netted Ackerman approximately $40 million annually in recent years.60 The dispute has revealed shocking business practices at the NRA, including the allegation that “[t]hroughout his tenure with the NRA, LaPierre has routinely used third-party vendors like [Ackerman McQueen] to conceal his penchant for personal spending, seemingly with the NRA’s blessing. By establishing an annual line-item budget for pass through expenses, he created a veritable black hole for unchecked spending that, in turn, appeared to be a legitimate vendor expense for purposes of NRA records.”61 Ackerman McQueen also alleges that LaPierre gave instructions to withhold information from NRA accountants.”62
- Under Wild Skies: A production company that the NRA engaged for years, Under Wild Skies, filed a lawsuit against the NRA alleging that the NRA owes it $17.1 million for breach of contract.63 The lawsuit further alleges that NRA representatives, including Wayne LaPierre and his wife, participated in free hunting safaris with Under Wild Skies in foreign locations such as Botswana, Tanzania, Mozambique, and Uruguay. In the litigation, Under Wild Skies claims to have video footage of Wayne LaPierre “firing multiple gunshots at an elephant in Botswana while attempting to kill it” and another clip of Susan LaPierre “cutting off the elephant’s tail … holding the elephant tail in the air, and proclaiming ‘Victory … with Under Wild Skies!’”64 The NRA’s top fundraiser, Tyler Schropp, was the treasurer of Under Wild Skies for many years.
- Law firm of William Brewer: As noted above, former NRA president Oliver North wrote letters to NRA management in early 2019 attempting to get an accounting for the more than $24 million in reported legal fees paid to the law firm of William Brewer.65 The legal bills have continued to mount in 2019 and 2020 with a recent court filing from Ackerman McQueen estimating legal bills to the NRA from the Brewer firm to be in excess of $54 million. Adding to the soap-opera nature of the NRA’s deepening crisis, Brewer is the son-in-law of Angus McQueen, the former leader of Ackerman McQueen and longtime friend of NRA CEO Wayne LaPierre. Ackerman McQueen, in court filings, has called Brewer’s firm “a PR firm masquerading as a law firm to try cases in the ‘court of public opinion,’ not the courtroom.”66 Indeed, it is unclear what the NRA is getting for these exorbitant legal fees, as Brewer himself has been walled off from the Ackerman–NRA litigation in Virginia since he is a potential witness, his firm has lost two discovery motions against the New York Attorney General, and the federal court hearing Brewer’s lawsuit against New York State concerning the Carry Guard investigation (a failed NRA insurance product, discussed infra) has thrown out the majority of his case.67 In one particularly bizarre instance, the Brewer firm left an electronic copy of a confidential presentation given to the NRA board of directors with Ackerman McQueen, its litigation adversary—forcing the firm to run to court to get the presentation back.68
The past year saw several members of Congress conduct investigations into the NRA’s alleged corruption and financial mismanagement.
Representative Brad Schneider (Illinois), a member of the House Ways and Means Committee, conducted a yearlong investigation into allegations of self-dealing and financial corruption at the NRA, culminating in a February 2020 report that called on the IRS to investigate the NRA.69
Further, Representatives Jamie Raskin (Maryland) and Gerry Connolly (Virginia) independently wrote to the IRS to investigate allegations of financial fraud at the NRA.70 Representatives Don Beyer (Virginia), Dwight Evans (Pennsylvania), and Tom Suozzi (New York) have also called for an investigation.71
In the Senate, Finance Committee Ranking Member Ron Wyden (Oregon) led an investigation that resulted in a report focusing on the NRA’s ties to Russia, titled “The NRA and Russia: How a Tax-Exempt Organization Became a Foreign Asset.”72 The findings included that “NRA leaders may have violated tax laws that prohibit use of organization resources for personal benefit.”73 Senator Wyden and Democratic Leader Charles Schumer (New York) have called on the IRS to investigate whether the NRA’s tax exemption should be disallowed.74
Additionally, Representative Raskin and Senator Sheldon Whitehouse (Rhode Island) continued to probe potential violations of campaign finance laws by the NRA and related election vendors hired by the NRA. Specifically, the lawmakers sought documents concerning allegations that the NRA violated campaign finance laws by coordinating communications with the Trump campaign in 2016 and multiple Republican congressional campaigns from 2014 through 2018.75
III. NRATV Shuts Its Doors
2019 also marked the dramatic end of the NRA’s flagship media platform, NRATV. Started in 2016, NRATV streamed firearm and Second Amendment-related content, including extreme news commentary and analysis. The platform was viewed as the organization’s most high-profile means of communication. Running its own television network was an expensive proposition, with the NRA spending upwards of $20 million a year to keep the network alive.76
Within a month of the chaos at the 2019 NRA Annual Meeting, Ackerman McQueen—which produced the programming for NRATV on behalf of the NRA—announced that it was seeking to terminate its relationship with the NRA, throwing the future of NRATV into doubt.77 By late June 2019, the NRA had terminated its contract with Ackerman McQueen, shutting down NRATV.78 The cancellation of NRATV meant the end of the NRA’s relationship with the personalities featured on the network, such as controversial commentator and NRA spokesperson Dana Loesch (who had actually been employed by Ackerman McQueen).79
The demise of NRATV brought about multiple retrospectives80 of the channel’s “unhinged”81 content, but perhaps most striking was the NRA itself admitting that its network aired content “which some NRA leaders found distasteful and racist” and that “NRATV often became viewed as a dystopian cultural rant that deterred membership growth.”82 In a legal filing, the NRA plainly said that “NRATV was a failed endeavor under any appropriate performance metric.”83
Despite the NRA’s stated view that NRATV was “an abject failure,”84 the organization acknowledged that it had been paying $20 million a year to keep the outlet online.85 For this significant investment, the NRATV website apparently had “minuscule” web traffic, with a media analytics report showing that it had only 49,000 unique visitors in January 2019.86 The floundering results are especially ironic in light of court filings that indicate that NRATV was initially viewed as “a good opportunity to generate revenue” for the NRA.87
IV. NRA Board and C-Suite in Turmoil
Just two weeks after the 2019 NRA Annual Meeting, a tranche of internal NRA documents was posted online that showed that Wayne LaPierre had billed nearly half a million dollars in luxury travel and clothing expenses through Ackerman McQueen.88 This, along with other allegations detailed in Section II, threw the NRA into unprecedented organizational chaos. In many instances, board members quickly found themselves on the outside of the NRA inner circle, as LaPierre worked to consolidate power and appeared to push out those questioning his management of the NRA.
After evidence of financial mismanagement came to light, multiple NRA board members called for an independent audit.
In July 2019, board members Sean Maloney, Timothy Knight, Esther Schneider, and Robert K. Brown wrote a letter to NRA leadership calling for “an independent, internal investigation and confidential audit into the allegations of financial misconduct” at the organization.89 Further, board member Owen “Buz” Mills called for an independent audit of the NRA.90 These efforts were in addition to those by President Oliver North, discussed previously, to ascertain details about the millions being spent on the NRA’s outside law firm.
NRA board members who spoke out faced alleged reprisals.
By July 2019, following the NRA’s 2019 Annual Meeting, public reporting indicated that “[a]t least six board members [had] publicly said they lost committee assignments after challenging leadership.”91 NRA board member Marion Hammer seemed to confirm the retaliatory nature of the removals, writing that “when some folks are actively involved in trying to undermine the NRA in a manner that I believe is worse than anyone in the gun control movement can, they deserve to be outside until they can be trusted.”92 Allen West, one of the board members removed from committee assignments,93 said NRA leadership had told “outright lies” about the board’s knowledge of LaPierre’s spending on clothes and travel said there was “the cabal of cronyism” operating within the NRA.94
NRA board member Robert K. Brown said that he had been dropped from three committees by the leadership, who, he said, “basically [fall] under the label of loathsome toads.”95
Fourth Member Resigns From NRA Board in a Sign of Further UpheavalWashington Post
In addition, eight NRA board members have resigned since the last NRA Annual Meeting.
Amid the internal turmoil and widening investigations, departures from the NRA board of directors have been frequent, with over 10 percent of the organization’s 76-member board stepping down in the last year. Board members Esther Schneider, Sean Maloney, and Timothy Knight resigned in August 2019, complaining that they had “been stonewalled, accused of disloyalty, stripped of committee assignments and denied effective counsel necessary to properly discharge our responsibilities as Board members.”96 These resignations occurred after their questioning of the NRA’s financial mismanagement and calling for an audit of the organization.
In addition, two board members close to Oliver North have resigned since the 2019 NRA Annual Meeting.
Richard Childress, who had worked with North to attempt to conduct oversight of the Brewer law firm’s fees, resigned in August 2019.97 In November, news broke that former Congressman Dan Boren—whom the NRA accused of being part of the leadership “coup”—had also stepped down.98
Three other NRA board members have resigned in the past year:
N.R.A. Suspends Second-in-Command, Implicating Him in Coup AttemptNew York Times
In addition to the board departures, multiple high-ranking NRA officials have left the organization amid scandal, with the most notable being the executive director of the NRA Institute of Legislative Action, Chris Cox. In June 2019, the NRA suspended Cox, its chief lobbyist and political strategist, claiming in a lawsuit that Cox had participated in the supposed conspiracy led by Oliver North to oust Wayne LaPierre.102 Jennifer Baker, then the chief spokesperson for the NRA-ILA, contradicted the NRA’s position in a statement, saying, “any notion that Chris participated in a coup is absurd.”103 But within days, Cox had resigned, effectively erasing his position as heir apparent104 to Wayne LaPierre.
Within days of Cox’s departure, the NRA installed Jason Ouimet, a lobbyist for the NRA-ILA, as his replacement, in a move reportedly “designed to temporarily stave off a mass staff exodus and calm both the organization’s members and the broader conservative world.”105 Upon Cox’s resignation, LaPierre wrote to NRA employees that the internal investigation into the allegations against Cox “will continue in the interest of the N.R.A. and our members.”106
In mid-July, LaPierre reportedly met with senior NRA-ILA staff in the wake of Cox’s departure to assure them that staff would have a “clean slate.”107 Just days later, however, NRA-ILA Director of Public Affairs Jennifer Baker was reportedly fired.108 Additionally, David Lehman, the deputy executive director and general counsel at the NRA-ILA,109 left the NRA.
Chief of Staff Josh Powell also departed the NRA, under a cloud of confusion and disturbing allegations. In August 2019, news broke that two separate claims of sexual harassment had been leveled at Powell.110 In one case in 2017, the NRA reportedly settled claims brought by an employee against Powell.111 In another case the following year, reports indicate that an employee of Ackerman McQueen claimed that Powell had sexually harassed her, leading the public relations firm to declare to the NRA that Powell would no longer have any dealings with Ackerman McQueen employees.112 According to Ackerman McQueen, the NRA “refused to cooperate,” and instead, Powell received “the full support of Mr. LaPierre and the board of directors,” despite “clear reason to believe” the employee’s claims.113
On February 1, 2020, NRA Secretary John Frazer emailed the NRA board to inform them that Powell was “no longer employed by the NRA.”114 The details of Powell’s departure were not provided.
V. NRA Makes Dramatic Cuts to Core Member Programs Amid Declining Finances
The NRA’s tenuous financial condition remained in the news over the last year as regulatory filings and investigative reporting continued to raise questions about the financial health and priorities of the organization. Internal NRA documents show that in past years the NRA has spent tens of millions of dollars on executive salaries, legal bills, administrative costs, and extravagant travel. Some of the reported spending was downright odd, such as spending nearly $9.3 million on office supplies in 2018,115 averaging more than $11,000 per employee116 that year. More traditional functions of the NRA, such as programs for sportsmen and gun safety training, haven’t fared as well. In fact, in 2018, less than 10 percent of NRA funds were spent on gun safety, education, and training, while the organization spent nearly $70 million on fundraising. These cuts to more traditional programs preceded what appears to be even larger spending cuts in what NRA CEO Wayne LaPierre, in a secret recording obtained by NPR, referred to as taking the NRA “down to the studs” financially in subsequent annual budgets.
Inside the NRA’s Finances: Deepening Debt, Increased Spending on Legal Fees — and Cuts to Gun Training.Washington Post
The NRA continues to rack up deficits and debt.
According to its own financial report, the NRA ended 2018 with a $10.8 million deficit,117 the third straight year the group has posted a deficit. Further, the NRA continued its history of borrowing, obtaining a $28 million line of credit by borrowing against its Virginia headquarters.118 As LaPierre acknowledged to the NRA board, in the recording obtained by NPR, the NRA is “not out of the woods yet. We still gotta wrestle with this financial situation.”
At the same time, NRA leaders are enjoying substantial increases in executive compensation.
In a period where the NRA announced a freeze of its employee pension fund, the organization’s most recent regulatory filings indicate that its top 10 executives took home an aggregate of $9.8 million in compensation.119 This includes a 57 percent increase in compensation to CEO Wayne LaPierre, who received a total of $2.15 million in the most recent reporting period.120
Former executives have been getting paid years after leaving the NRA.
Two executives who left the organization in 2016 were paid significant amounts in 2018 by the NRA, according to the NRA’s regulatory filing: Michael Marcellin (former Managing Director of Affinity and Licensing), who received $535,045 in taxable compensation, and Robert Weaver (former Executive Director of General Operations), who received $720,000.121
Don’t worry… the NRA’s lawyers are also getting paid.
The NRA’s most recent financial report indicates a nearly 400 percent increase in spending on “Administrative – Legal, Audit and Taxes.”122 In particular, the NRA disclosed paying $13.8 million in the most recent regulatory filing period to the law firm of its top lawyer, William Brewer.123 However, that disclosure apparently understates the total payments to the law firm, with Oliver North documenting expenses of over $24 million with the Brewer firm between 2018 and early-2019.124 Remarkably, the legal bills have continued to mount in 2019 and 2020. A recent court filing from Ackerman McQueen estimates aggregate legal bills to the NRA from the Brewer firm to be in excess of $54 million in the past two years.
NRA’s Wasteful Spending
Over $54 million
estimated billings of the law firm of William Brewer
Nearly $70 million
on fundraising costs such as telemarketing and direct mail
Over $9 million
on office supplies
Nearly $10 million
in executive salaries
Conversely, NRA staff is facing layoffs and mandated pay cuts.
On March 23, 2020, LaPierre sent a memo to NRA staff informing them of an across the board 20 percent reduction in pay and upcoming layoffs at the NRA. LaPierre wrote, in part, “[w]e must address immediate financial challenges and, as importantly, plan for long-term impacts to ensure the viability of our organization during this crucial year” and “[u]nfortunately, these changes will necessitate the elimination of certain positions on either a temporary or, in some cases, permanent basis.”125 The memo points to the cancellation of the NRA’s Annual Convention and various “Friends of the NRA” fundraisers as necessitating the cuts. In April 2020, reporting indicates that the NRA laid off more than 60 employees, causing one NRA board member to complain of a “lack of transparency and failure to communicate” by NRA leadership, pointing to what he called “incompetent and inept leadership on the part of those unnamed individuals making these decisions!”
Large NRA donors are growing uneasy with the NRA’s “daily soap opera.”
It was reported that an organized effort led by a large donor to boycott financial giving to the organization resulted in more than $160 million in financial pledges being withheld from the NRA.126 Additionally, David Dell’Aquila, a large NRA donor from Tennessee organizing the boycott, filed a federal class action against the NRA relating to misuse of association funds by LaPierre and others.127 Dell’Aquila was quoted as saying that the NRA’s internal warfare “has become a daily soap opera and it’s decaying and destroying the NRA from within, and it needs to stop.”128
Some charitable funds have even suspended the NRA Foundation’s participation in light of investigations.
Certain charitable funds, including one run by Charles Schwab, have stopped allowing customers to make donations to the NRA Foundation and other NRA-affiliated 501(c)(3) organizations. An official with Schwab Charitable said of the decision, “Like other donor-advised fund providers, Schwab Charitable follows IRS guidances and suspends grants to [non-profit] organizations that are under investigation. In accordance with this policy, Schwab Charitable is not currently facilitating grants to 501(c)(3) public charities involved in the investigation of the NRA.”129
In October 2019, the Everytown for Gun Safety Support Fund filed a complaint with the Office of Personnel Management (OPM) to investigate and expel the NRA Foundation from participation in the Combined Federal Campaign, the workplace giving program for federal government employees.130
NRA FACES CHARGES RELATING TO INSURANCE PRODUCT “CARRY GUARD”
The NRA’s “Carry Guard” insurance program, which promised to cover an individual’s legal expenses if they shoot someone and claim self-defense, was unveiled at the 2017 NRA annual meeting with much fanfare but has subsequently become a regulatory debacle.
In February 2020, the New York State Department of Financial Services formally charged the NRA with acting as an unlicensed insurance producer with respect to Carry Guard. The State alleged that Carry Guard violated the insurance law by offering policies that purported to cover costs (i.e., defense costs in a criminal prosecution) associated with the aftermath of shooting someone. Additionally, the State alleged that the NRA deceived its members with misleading marketing practices.131 These civil charges follow a multi-year investigation that began in 2017, when the Everytown for Gun Safety Support Fund conducted and shared with regulators an investigation and legal analysis of the NRA’s Carry Guard program.
Among other allegations, the State’s charging document states: “[d]espite representing to its members that the NRA insurance programs were negotiated in order to obtain coverage ‘at the lowest possible cost’ to its members, it is clear that the NRA members could have negotiated less expensive coverage for its members but for the fact that a substantial portion of the premiums paid by NRA members — sometimes exceeding 20% — was being paid to the NRA in the form of royalties. Marketing materials relating to NRA-endorsed insurance programs wholly failed to disclose that the NRA was receiving royalties based on the amounts paid by its members.”132
The proceedings with the Department of Financial Services promise to extend through 2020, costing the NRA even more financially. Some of the NRA’s partners in this venture—Lockton Affinity, Illinois Union, and Lloyd’s of London—have already settled with regulators in New York State and/or Washington State for an aggregate of more than $13 million in fines.133
The NRA decreased spending for gun safety training and hunter services.
Amid the NRA’s questionable business practices and increased debt, the NRA has cut funding for some of its core functions. In reviewing the NRA’s 2018 financial report, the Washington Post reported that “[a]mid last year’s financial crunch, the organization cut funds for gun training, a key purpose spelled out in the NRA charter. Spending for educating gun owners about safety and marksmanship dropped by nearly a quarter from 2017 to 2018, from $42.6 million to $32.7 million.”134 The NRA’s regulatory filing with the IRS provided more detail, disclosing a 22 percent decrease “for education and training,” a 61 percent decrease in “hunter services,” and a 51 percent decrease in “field services.”135
Spending Cuts at the NRA
for “education and training”
in “hunter services”
20% pay cut
across the board, layoffs
VI. Dwindling Power: Virginia Rejects The NRA’s Agenda in 2019
Virginia voters rejected the NRA’s agenda in its home state.
In Virginia’s 2019 elections, voters elected a gun-sense majority to the state’s General Assembly for the first time in more than 20 years, a stunning rebuke to the NRA and its dangerous agenda, in the state where the NRA is headquartered. Virginia’s new state legislators acted swiftly to enact comprehensive gun safety reforms, including background checks on all gun sales and a strong red flag law.
Gun safety was the number one issue for Virginia voters, following legislators’ refusal to act on gun safety.
In the wake of the mass shooting at the Virginia Beach Municipal Center, Virginia lawmakers refused to take action on gun safety during a special legislative session. In fact, the legislature gaveled out a special session to deal with gun violence after only 90 minutes and without considering a single bill.136 The NRA explicitly took credit for the legislative gridlock.137 Following this inaction, gun safety was the number one issue for voters, according to public and private polling. A post-election poll of swing-district voters found a candidate’s position on guns was “important” to 83 percent of voters, and among voters who said gun issues were their top concern, 66 percent voted for candidates who supported gun safety.138 Notably, even a previously NRA-endorsed and A-rated candidate ran away from the NRA’s unpopular agenda, running a TV ad that contradicted her own voting record and the NRA’s positions.139
Additional indicators beyond Virginia suggest that the NRA’s influence is waning. Most notably, President Trump openly worries that the NRA’s power has been diminished. According to the New York Times, Trump has told top aides that the NRA is “going bankrupt.”140 Trump has even tweeted that the NRA “must get its act together quickly, stop the internal fighting, & get back to GREATNESS – FAST!”141
Republican strategists say the NRA has lost its power amid turmoil.
Following the El Paso, Texas, and Dayton, Ohio, mass shootings in 2019, Republicans acknowledged the NRA’s declining influence. According to one Republican congressional staffer, the NRA’s “tired tactics and empty threats” were a joke to Republican staffers on Capitol Hill.142 A conservative national radio host said that “The National Rifle Association seems to be impotent right now.”143
Chris Cox’s resignation leaves the NRA without its principal political strategist.
For more than a decade, Chris Cox led the NRA’s political efforts as head of the NRA-ILA, and his departure from the NRA leaves the NRA without its most important political strategist. One Republican political operative said, “Every Republican senator who matters has Chris’ cell phone number… and vice versa.… Senators didn’t call Wayne [LaPierre],… they called Chris.”144
The NRA has lost legislative allies and become increasingly reliant on one political party.
The NRA “has significantly fewer allies in Congress than it did a decade ago, a decline driven by the near-total fraying of the group’s ties to Democrats in the House and the Senate,” the New York Times found, based on an analysis of the organization’s letter grades and candidate endorsements.145 The decline has come amid a seismic shift in Democratic lawmakers’ support of gun safety measures that are opposed by the NRA.
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The NRA’s substantial legal and political crises have exposed the organization for what it is: a path to personal enrichment for its leaders and an extremist mouthpiece for gun manufacturers, rather than the voice of ordinary hunters and sportsmen that it claims to be. While this report chronicle the NRA’s controversies and missteps over the past year, the NRA’s future appears even bleaker than its past as the organization faces seemingly endless litigations and investigations, at the same time the NRA faces a rising gun violence prevention movement that has never been stronger.